Evaluations are a normal part of all organizations. For evaluations to be effective, the criteria used during the evaluations must be planned carefully. Key components of evaluation criteria include understanding the program objectives, the effectiveness of the activities used by a company to reach the objectives, the efficiency of the company’s outputs, the impact of the company’s activities and the sustainability of the business.
Understand the company’s main objectives. In order to evaluate how an organization is performing, there must be something to compare the actual performance to. In evaluations, this often starts with a review of the company’s goals. Before the criteria for an evaluation can be developed, the objectives of the organization must be clear to those performing the evaluation.
Determine if the activities are sufficient to meet the organization’s objectives. The first piece of the evaluation criteria must be an investigation of the company’s core operating activities. These activities should be evaluated to determine whether or not they are being conducted properly. If there are gaps or deficiencies, management can take strategic steps to bridge those gaps to improve the overall process.
Measure effectiveness. The next piece of evaluation criteria is determining how well the activities actually helped the organization meet its goals. This includes determining the likelihood of the company meeting its goals based on the way the company’s activities are set up.
Assess the company’s efficiency. The next step in determining evaluation criteria is to set up a measurement tool to measure the efficiency of the organization’s output. This tool will consist of evaluation techniques that measure if the company is using its resources wisely and in a cost-effective manner. This also means assessing whether the goals were achieved on schedule. These measurements can help management design alternative solutions to make the company’s operations more efficient.
Investigate the impact the company has. Another key piece of evaluation criteria is studying the impact of the company. This part of the evaluation investigates the results of the company’s operations. It looks into the positive and negative impact the operations have caused. Some of these impacts may be unintended, and so the evaluation would have to determine why they occurred.
Evaluate the sustainability. This criterion is used to determine how changes in the competitive landscape, regulatory environment, economic conditions, customer preferences and the job market influence the company's ability to sustain sales and profit growth.
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